By africapractice

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A new report funded by the Rockefeller Foundation estimates that the field of Impact Sourcing, employing socioeconomically disadvantaged people in Business Process Outsourcing (BPO) centers, is currently $4.5 billion and has the potential to reach $20 billion and employ 780,000 by 2015. The report, conducted by Monitor Group, suggests a strong business case for Impact Sourcing, which can provide high quality, reliable services at prices that are at least competitive with traditional BPO centers and, in some cases almost 40 percent lower than what traditional providers can offer.

The findings, contained in the new working paper, Job Creation through Building the Field of Impact Sourcing, also finds significant potential for poverty alleviation because Impact Sourcing workers can earn incomes up to 100 percent over alternative employment options.

The working paper is part of the Rockefeller Foundation’s Poverty Reduction through Information and Digital Employment (PRIDE) work. Through PRIDE, the Rockefeller Foundation plans to support the development and testing of Impact Sourcing business models, support research on interventions and continue to build the network of key Impact Sourcing stakeholders to advance the field.

Impact Sourcing employs individuals with limited opportunity for sustainable employment as principal workers in Business Process Outsourcing (BPO) centers to provide high-quality, information-based services to domestic and international public and private-sector clients.

“Harnessing the global BPO trend, PRIDE exemplifies the Rockefeller Foundation’s commitment to promoting growth with equity, in which the poor and vulnerable have more access to opportunities, such as ICT employment,” said Dr. James Nyoro, Managing Director, Africa. “The Foundation is proud to partner with Monitor on this important research, which drives the idea that employing low-income workers will provide them with sustainable income which can lead to positive social outcomes, ultimately helping to improve livelihoods and build relevant skills for employment in the fast growing ICT sector.”

Job Creation through Building the Field of Impact Sourcing features case studies on current Impact Sourcing models in Africa, India and other regions, including those of Foundation grantees like Digital Divide Data, a social enterprise with the objective of creating jobs for poor and disadvantaged youth in Cambodia, Laos and Kenya; and Samasource, an intermediary that markets and sells Impact Sourcing services to clients based in the United States and United Kingdom.

“Based on more than 120 interviews across 13 countries with Impact Sourcing managers, providers of BPO services, outsourcing experts, employees, outsourcing clients, government officials, and other individuals linked to the Impact Sourcing space, this analysis creates a shared understanding of the current situation, the size of the opportunity and action agenda necessary to build this field,” said Michael Kubzansky, Global Head of the Monitor Inclusive Markets Initiative.

By Mark Atterby, Senior Writer

There are a number of reports and indexes produced each year highlighting the top countries as outsourcing destinations for IT and BPO. As one would expect India tops all of these lists. The runner-ups tend to include China, Malaysia and Philippines. In fact Asia Pacific countries, where even North Korea has been trying to get in on the act, dominate most of the lists.

After that there are quite a number of countries jostling for their position in the sun. Some such as Egypt and Pakistan, who were positioned as threats to India, have to tended to fade off the outsourcing radar due to instability.

In its report 10 Leading Locations for Offshore Services in Asia Pacific and Japan for 2010, Gartner analysed countries as offshore services locations using criteria such as language, infrastructure, education, cost, cultural compatibility, legal maturity, and security. The ranking of each country in the AT Kearney Global Services Location Index (GSLI) is composed of a weighted combination of relative scores on 43 measurements, which are grouped into three categories: financial attractiveness, people skills and availability, and business environment.

Sourcingline scores each country across dozens of key statistics that fall into three broad areas of Cost Competiveness, Resources & Skills, and Business & Economic Environment. India continues to grow its IT services exports, but its share of the worldwide total has declined, and wage pressures, geopolitical troubles and financial scandals are creating opportunities for other countries.

The Americas and Europe are the largest customers for the Indian outsourcing industry and account for 60% and 31% respectively of IT and BPO exports. The largest vertical sectors are financial services (41%), high-tech/telecom (20%), manufacturing (17%) and retail (8%). In 2009, the IT and BPO export industries employed about 2.2 million people.

Over the last few years, numerous locations have emerged in South America, Africa, Eastern Europe and the Middle East to challenge India’s dominance. Countries like Brazil, Egypt, and Vietnam have emerged as viable destinations. For a while, Egypt was touted as a new India. In 2009, Egypt was ranked fourth by the AT Kearney list before the troubles began. The recent government overthrow has certainly put the clamps down on the level of outsourcing opportunity.

Lead analyst at Ovum, Peter Ryan, said the unrest is putting the country’s outsourcing credentials at risk. “Following recent border violence in Mexico and the 2009 terror attacks in Mumbai, the events in Egypt are certain to make outsourcers and their clients much more risk-averse than any time in recent memory, and are likely to push many companies to choose the more secure, albeit costlier, option of keeping third-party work onshore”.

The Middle East and North Africa have emerged as major off shoring locations due to their large, well-educated population and their closeness to Europe. Likewise countries such as Bulgaria, Hungary and Serbia provide low cost centres for West European enterprises. There are also onshoring trends to lower cost cities within the US, UK, France and Germany — big western democracies facing political pressure to keep jobs at home.

Countries in Latin America and the Caribbean continue to capitalise on their closeness to the United States as nearshore destinations. In addition to cost savings, Latin America offers US companies time zone alignment and geographic proximity, though there are some drawbacks to consider, including language barriers and lack of vendor maturity.

By Nicola Mawson, ITWeb senior journalist

The South African (SA) Government’s new incentive scheme is expected to create 30,000 new jobs in the next five years, says Bulelwa Koyana, CEO of Business Process Enabling SA.

New grants to entice foreign companies into SA’s business process outsourcing (BPO) sector are already starting to pay off as new investments are being attracted into the sector.

The Department of Trade and Industry’s (DTI’s) new scheme came into effect this month. It replaces a previous system under which companies could claim for training and infrastructure.

Government’s new incentives will reduce the cost of BPO operations in SA by up to 20%, as investors will be paid R112,000 for each full-time job created and maintained. The incentives will be paid out over a three‑year period, in installments of R40,000 for the first two years and R32,000 in the final year.

The DTI’s new plan replaces the previous Government Assistance and Support (GAS) initiative, which paid out R688 million between July 2007 and March 2010. However, GAS had been criticised because of the amount of red tape involved in accessing the funds.

Local and foreign investors, registered as legal entities in SA, will be eligible for the programme if they create a minimum of 10 jobs.

Bulelwa Koyana, CEO of umbrella industry body Business Process Enabling SA, says the programme is expected to create at least 30,000 new jobs in the next five years. At the moment, SA’s BPO sector employs about 10,000 people.

“Quite a few international investors, mostly from the UK, US, and the Netherlands, have been waiting on the sidelines during this process,” says Koyana. As more investors take advantage of the incentives, about 6,000 jobs should be created this year, she adds.

Kobus van der Westhuizen, VP of Aegis BPO SA, says the programme will flow through to new investment in the sector as it makes SA more globally competitive. With the new scheme in place, SA is at least 50% cheaper than a BPO operation in the UK, for example, he notes.

The government’s new scheme has removed the red tape involved in claiming benefits, comments Van der Westhuizen. As a result, companies are able to factor the reduced cost into their planning, which was not previously the case.

Van der Westhuizen says Aegis SA has already seen interest as a result of the investment, and is currently busy with a project that should create 1,000 jobs. The project has been made possible as a result of the new programme, he points out.

The new incentive scheme of R112,000 per seat is almost double what GAS was able to offer, making SA far more competitive from a global cost perspective, says Koyana.

The programme will run for five years and any three years in the five can be claimed against for incentives. In addition to the per-job incentive, companies that create 400 to 800 offshore jobs will receive a 20% bonus on a once-off basis. This figure increases to 30% if more than 800 jobs are created.

http://www.itweb.co.za/index.php?option=com_content&view=article&id=40278:bpo-grants-paying-off&catid=69

The IT Enabled Services Secretariat (ITES) of Ghana is hosting its first major regional business process outsourcing summit, to be held at the La Palm Royal Beach Hotel in Accra.

The event is called Ghana Outsourcing Leadership Summit 2010, and it is scheduled for the 20th to the 21st of September. It is the first conference on outsourcing in the country and throughout the West African region.

With the theme, “Optimising Business Processes Through Outsourcing,” the conference will focus on recognising and how to realise objectives and goals to improve business operations with the help of outsourcing.

The summit will cover several topics such as current engagement models, global trends, best business outsourcing practices, the benefits of outsourcing, and emerging standards and capabilities.

Among the delegates will be top management and business leaders from different industries like banking, finance, telecommunications, oil and mining, airlines and international travel, and healthcare. Senior government sector officers throughout the region will also be in attendance.

An additional feature of the summit is an exhibition of outsourcing solutions, where BPO service providers, call centre and telecoms operators, and software developers and resellers will participate.

The Ghana government recognises the undeniable potential for jobs that the outsourcing industry has, and hosting the BPO summit is one of the ways of edging out their competitors to be the industry leader in the region.